Thursday, May 26, 2011

Seems like radio frequency (RF) spectrum, or lack of it, is a hot topic these days.

Consider the recent buzz on spectrum in the industry.

AT&T, in addition to owning a large block of 700 MHz spectrum along with its 850/1900 MHz holdings for its cellular network, is willing to plunk down $39 billion to buy T-Mobile USA, ostensibly to gain access to T-Mobile USA’s extensive spectrum holdings across the country. If the deal goes through, AT&T gains T-Mobile USA’s existing 1900 MHz spectrum and more importantly, the 120 licenses of AWS (1.7/2.1 GHz) 20 MHz spectrum for which T-Mobile USA paid $4 billion in the 2006 auction.

Right behind that, AT&T has offered to buy 22 700 MHz licenses from a rural service provider that operates in parts of Minnesota and Wisconsin.

Verizon already has started its LTE build-out in the 700 MHz band as an overlay to its existing CDMA 1900 MHz network. The company just announced LTE build-outs in 21 new markets starting in June 2011.

Sprint with its Network Vision architecture intends to recast its customer access to available spectrum by consolidating its holdings across the 800/900, 1900 and 2500 MHz bands.

On May 20, 2011, the FCC issued a Public Notice inviting technical input on how to maximize the 2 GHz band for fixed/mobile applications.

WCAI itself has been vocal in calling for channel allocations that are both wider and contiguous in certain bands such as 2.5 GHz. Such adoption by regulators would make use of this spectrum more “effective and efficient.”

Spectrum translates into bandwidth. More bandwidth means wider channels for carrying information. Wider channels mean faster download speeds that can support a greater array of services: high-speed Internet access, mobile voice, and increasingly, video. And more services simply means greater revenues for the service providers.

Where is all this demand for more spectrum coming from? Quite simply, it comes from the surge in usage of data-intensive smartphones, tablets, and mobile-enabled laptops that is driving demand for any speed, anywhere, any media services. If the carriers are going to deliver, they will need access to more spectrum wherever it can be made available.

Consider what happened when AT&T first released the Apple iPhone. In the beginning, the company was pleasantly surprised at the customer take-rates despite the iPhone’s high purchase price. But then, with literally millions of iPhones coming online in major markets in a matter of months, AT&T began to see its network suddenly bog down as all those data-rich devices tried to get a high-speed connection. Clearly, the company was unprepared for the surge in data traffic usage that iPhones generated. Needless to say, iPhone users were not very happy with AT&T’s performance. So the company embarked on a rapid network upgrade program to expand capacity in both the access network between customers and cell sites, and in the backhaul network that connects cell sites to switching centers. AT&T’s current motivation in scooping up more spectrum likely has as much to do with avoiding future network congestion as it does for providing new data-rich services. In this context, all wireless service providers, whether in metro or rural markets, are facing similar capacity issues.

This situation begs the question: how much investment will be needed to build the network that can handle all this traffic?

Two main factors drive wireless capital expenditures (capex) – the number of wireless devices connected to the network, and the minutes of use (MOUs-voice & data) that each device generates. The number of devices is proliferating when you count smartphones, tablets, mobile-enabled laptops, and growing volume of machine-to-machine (M2M) connections for a host of industrial and commercial applications. And each device is churning out ever-increasing megabits per second of information. Taken together, the data traffic load on the network is expected to grow at high double-digit rates annually with no foreseeable deadline. This means that wireless carriers will book, for some time, significant capex as they expand area coverage and increase data-handling capacity, while beefing up the backhaul network throughput.

In the end, this capex pace and duration will be gated by the amount of spectrum being freed up over the next several years. That will create even more buzz!

Friday, May 20, 2011

We just announced that Ericsson, the industry leader in managed services, will manage the day-to-day operations of the Clearwire 4G network. The seven-year, managed services partnership will allow Ericsson to implement their proven global best practices in network management while allowing Clearwire to focus on increasing operational efficiencies and reducing operating costs.

So what does this mean for the folks that built the nation’s first 4G network? We’re happy to report that approximately 700 Clearwire employees are expected to begin performing their network functions as Ericsson employees in locations around the United States before the middle of this year. This also means that network performance isn’t going to suffer because the work we’re seamlessly transitioning to Ericsson will still be performed by the same skilled and talented network employees who perform the work today.

What about our customers, you say? As we just mentioned network performance won’t be an issue so they’ll still have the same great 4G experience. But also, customers will see no change in their interactions with Clearwire because we will remain the priority point of contact. (The same is true for our wholesale partners and vendors.)

As for the significance of this anouncement? We want to direct your attention to a third-party perspective that we found to be quite profound.

“This managed services partnership is the next logical step for both Clearwire and Ericsson, one that will have significant near -term and long-term benefits for Clearwire’s employees, customers, retail distributors and investors,” observed Berge Ayvazian, Senior Consultant with Heavy Reading. “It also represents Ericsson’s second managed services contract in the U.S., building on the Network Advantage agreement that has already delivered major operational and economic benefits for Sprint.”

In short, while we have entered into an agreement with a company whose core competency is network excellence, Clearwire will continue to own our 4G network and remain responsible for network design, network strategy, vendor selection and long-term investment decisions. Our network is still ours – Ericsson is just managing it – allowing us to streamline the business and deliver a high-quality mobile broadband experience to our customers.

Wednesday, May 4, 2011

Next-generation 4G networks will create new opportunities for wireless operators and service providers, but will also present a range of fresh challenges. WCAI will hold a webinar to take an in-depth look at the implications of 4G for the way wireless services are delivered and networks are run. The webinar will focus on the strategic role of real-time analytics in providing the fine-grain data analysis that will enable providers to deliver compelling, revenue-generating new services—while controlling operating costs.

The webinar – "Real-Time Actionable Intelligence Strategies for 4G Operators" – is scheduled for Wednesday, May 18 at 11 am (U.S. Eastern Time). Moderated by Berge Ayvanzian of Heavy Reading, it will feature David Wiseman, Director Telecom Business Development at Sybase an SAP Company. Sponsored by Sybase an SAP Company, the webinar is free of charge and open to all. Register now!

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About WCAI

The Wireless Communications Association International (WCAI) exists to advance economic opportunity for the wireless broadband industry worldwide. WCAI is a technology-neutral trade association that seeks to establish a governmental environment favorable to the wireless broadband industry. WCAI also promotes wireless broadband through programs to enhance industry standards, collect and disseminate relevant economic and regulatory information, and increase public awareness of the industry's products and services. Our motto is "Broadband Everywhere, All the Time."